Khitnarain Sahi and Others vs Surju Seth and Others

Macpherson, J.—This is an application by the judgment-debtors in an execution case in the Court of the Deputy Magistrate Subordinate Judge of Palamau against the rejection of their objection of 13th September 1930 that their immovable property which was on sale on that day and which was actually sold some days later, was not saleable in execution of the decree.

The Chakla estate, in which the petitioners are interested to the extent of eight annas, was from 1906 to 1920 administered under the provisions of the Chota Nagpur Encumbered Estates Act 1876 (hereinafter designated ''the Act.") In 1920 it was, with the exception of certain forest land in Mauza Chakla and Mauza Nagar, released from the provisions of the Act except Section 12-A.

As possession and enjoyment of the property was restored under the provisions of the first or third Sub-sections of Section 12 to the petitioners who were the holders thereof when the application to bring it under management was made in 1906, the petitioners are under Sub-section 1, Section 12-A, incompetent without the previous sanction of the Commissioner

(a) to alienate such property, or any part thereof, in any way or (b) to create any charge thereon extending beyond (his their) lifetime,

and under Sub-section 3 every alienation and charge made or attempted in contravention of Sub-section (1) is void. Furthermore Sub-section (4) authorizes the Deputy Commissioner to inquire whether the holder of property has made or attempted to make any alienation or charge in contravention of that Sub-section and Sub-section (5) provides that if the Deputy Commissioner after such inquiry requests that the provisions of the Act be re-applied, a fresh order may be made appointing a Manager and vesting in him the management of the property.

In 1921 the petitioners borrowed money on a registered bond and in 1922 executed a mortgage rehan in respect of the same debt. The opposite party obtained in 1929 a decree for Rs. 5,473 on the registered bond and in execution proposed to sell the eight annas share of the petitioners in Mauza Chakla and Mauza Dadhu.

The judgment-debtor filed an objection that Section 12-A of the Act was a bar to such a sale. This objection was rejected on 12th February 1930 in the words "J.D.''s objection disallowed. Heard pleaders."

Thereafter applications were filed by several creditors that their encumbrances be notified and the Court directed that a usufructuary mortgage being an alienation could not, and that a simple mortgage, being not an alienation but falling within the category of. "charge" within the lifetime of the mortgagor could, be notified.

In May 1930 the Commissioner of Chota Nagpur accorded permission to the petitioners to alienate their eight annas share in the three mauzas Dadhu Garenja and Semarsat. Eventually on 13th September 1930 when the Court would concede no further postponement the objection was filed out of which these proceedings have arisen, setting out that the property on sale could not be sold as the decree-holder had not obtained the sanction of the Commissioner and attaching a copy of the decision of Rowland, J. dated 23rd May 1930 in Ram Dass and Another Vs. Bhagwat Narain Singh and Others, . The learned Judges there set out that he was not satisfied that the Judicial Commissioner of Chota Nagpur had committed any error of law in holding that Section 12-A of the Act read with Section 60, Civil P.C., prevented a property released u/s 12 of the Act from being sold on a money decree without the sanction of the Commissioner. The learned Subordinate Judge passed the following order on the objection:

The judgment-debtors have filed a petition stating that the properties have been put up to sale without obtaining the permission of the Divisional Commissioner of Chota Nagpur and as such the said properties cannot be sold u/s 60, Civil P.C., and Section 12-A, Chota Nagpur Encumbered Estates Act. Heard pleader. An objection u/s 47, Civil P.C., was already filed on 9th September 1929 and disallowed after hearing on 12th February 1930. Judgment debtors then on 19th June 1930 filed a petition that they had obtained Commissioner''s sanction to sell the properties and since then they always took time for payment of the money after private sale. The objection is disallowed.

The decree-holder then purchased the petitioner''s half of the two villages.

In support of the present application it is urged that under the provisions of Section 12-A and Section 60, Civil P.C., neither village could be sold--Chakla, because the Commissioner had not granted permission, and Dadhu because the permission which he granted in respect of it was for a private sale and he might have refused permission for an involuntary sale. The plea as regards Dadhu is however not pressed and indeed the copy of the order of the Commissioner granting permission to alienate does not show that the sanction was circumscribed in any way. A preliminary objection that the matter is res judicata [Mungal Prasad v. Grija Kant 1881 8 Cal. 51 is not pressed as the question admittedly depends on whether under the statute the sale is void.

The question then is whether without the sanction of the Commissioner the sale or attempted sale of Mauza Chakla on a money decree obtained against the proprietors who are subject to Section 12-A is void u/s 12-A. In my opinion there can be no serious doubt that the answer is in the affirmative. The object of the Act of 1876 is to provide for the relief of "holders" of land in Chota Nagpur who may be in debt and whose immovable property may be subject to mortgages, charges and liens, and the method adopted is to vest the management of the property of a holder in an officer appointed by the Commissioner and termed the "manager" whose function is to clear off the encumbrances after which the property is released to the "holder." For reasons of public policy the property is to be saved to the holder. But after the release, the holder, it was found, frequently lost no time in nullifying all that had been done on behalf of the property by entering upon a course of extravagance or mismanagement which endangered the property. To deal with that position the legislature in 1902 enacted Section 12-A. That enactment deals in sub-Ss. (1) to (5) with a person who was the holder both when the Act was applied to the property and when the property was released to him, and so far as the property is concerned, the enactment continues his disabilities in respect of it, practically placing him under the tutelage of the Commissioner in respect of everything but the usufruct. Without the sanction of the latter he cannot alienate the property or any part of it in any way nor create any charge upon it extending beyond his own lifetime and any such alienation or charge made or attempted is void. Manifestly the intention of the legislature was that the property should reach the heir of the holder intact and should be so unencumbered as it had been released to the holder himself. The object of the enactment is the protection of the property itself. The disposing power of the holder is taken away entirely except in respect of the usufruct during his lifetime. To employ the language of Section 60, Civil P.C., he no longer possesses over the property a disposing power which he may exercise for his own benefit; he retains such a power only over the profits from the property during his lifetime. The provisions of sub-Ss. 4 and 5 also are highly significant in this connexion.

It is indeed suggested by Mr. B.C. De on behalf of the decree holder that either by deliberate omission or by overlooking the necessity for such a provision the legislature has actually failed to forbid an involuntary or Court sale of the property and he points to Sub-section (6) as indicating that the legislature where it intended to bar suits did so explicitly and to the provisions of the Chota Nagpur Tenancy Act 1908, Section 46 of which places restrictions on the transfer of their rights by raiyats and Section 47 of which goes on to place restrictions on sales of raiyat''s rights under order of Court.

Now Sub-section (6) substantially bars against all holders and not merely the class covered by sub-Ss. (1) to (5), suits on a promise to pay a debt and on a ratification of a promise or contract of a holder to whom property has been released, where the promise or ratification is subsequent to release and the debt was contracted or the promise and contract was made during "management."

It deals with revival of old commitments and wipes it out by barring a suit upon them. In the earlier Sub-sections where new commitments are dealt with the legislature took an equally efficacious though different course by prohibiting alienation, which includes sale, by the holder of his immovable property. It did not desire to prohibit a suit on a charge on the property such as is permissible u/s 12-A(1)(b), but when the suit has been successful, the bar to all alienation is to come in to prevent a proposed sale in execution of the decree just as it would prevent a sale or attempted sale by private contract, the remedy against the judgment-debtor, if any, being perhaps, as in the case of the incumbent of a ghatwali tenancy similarly circumstanced, the appointment of a receiver of the usufruct of the property during the holder''s lifetime.

Then I fail to see how any inference can be drawn from the analogy of the provisions as to raiyati tenancies in the Chota Nagpur Tenancy Act, 1908. Sections 46 and 47 do not completely overlap and in any case, as has frequently been remarked, the legislature was in that instance determined to take no risks that its intention should be misunderstood or misinterpreted. It cannot be inferred from the absence of a double-barrelled provision in the Encumbered Estates Act which deals with much more sophisticated classes, that the legislature did not intend to prohibit a sale by the Court of the property of the holder. To my mind the legislature provided in the earlier Sub-section of Section 12-A against such a sale by reasonable and necessary implication and in view of Section 60, Civil P.C., it was superfluous to provide specially against an indirect sale of the property. Property is not liable to sale by the Court unless the judgment-debtor has a disposing power over it for his own benefit The measure of liability to involuntary alienation is the power of voluntary transfer. The latter is taken away from the holder by the statute so far as sale or attempted sale of the property is concerned and the exercise of it is rendered void. Full ownership is cut down; the holder''s power of disposition for his own benefit is restricted to the profits accruing within his lifetime. There is, as already indicated, ample precedent in Chota Nagpur in the enactments prohibiting on grounds of public policy the transfer, save in exceptional circumstances, of raiyati holdings, and in the Jaw governing ghatwali tenancies which also cannot be sold on a decree against the incumbent for his debt. Then the whole purpose of the enactment would be frustrated if by indirect means--it would ordinarily also be collusively--the holder could effect the alienation which he is forbidden to make directly.

It may be pointed out in addition that there is of course no inequity in favour of creditors who know quite well how little security the statute leaves them in respect of advances to disqualified borrowers definitely subject to Section 12-A.

In my opinion the Subordinate Judge had no jurisdiction to sell the petitioners share in Mauza Chakla. The application must be allowed in respect of it and the sale be set aside to that extent. The petitioners are entitled to their costs, pleader''s fee two gold mohurs.

Dhavle, J.

I agree.